how do you predict the future?

wekim

Junior member
36 7
Why laugh? Hare uses a system with random variables to make trades... and apparently it works.

You really don't need to be able to predict the future to make it.
Why criticize me for laughing instead of trying to think it through and understand WHY I'm laughing?

If you think picking variables at random and picking stops and targets at random will "apparently work", then I've got a bridge in Brooklyn to sell you.

For him to state that he has done "usually no analysis to determine the most likely outcome" is just his attempt to try to sound profound with a blunt statement which cannot be true. Assuming he does win, and even if he uses random variables, he must have done some backtesting; that in of itself qualifies as analysis.
 
  • Like
Reactions: new_trader

new_trader

Legendary member
6,468 1,393
Why criticize me for laughing instead of trying to think it through and understand WHY I'm laughing?

If you think picking variables at random and picking stops and targets at random will "apparently work", then I've got a bridge in Brooklyn to sell you.

For him to state that he has done "usually no analysis to determine the most likely outcome" is just his attempt to try to sound profound with a blunt statement which cannot be true. Assuming he does win, and even if he uses random variables, he must have done some backtesting; that in of itself qualifies as analysis.
(y)

I don't buy into the random system thing. I'd say it is systematic...either that or we need to redefine "random".
 

new_trader

Legendary member
6,468 1,393
Nobody can know for certain the future. But people can predict it, and do so regularly.
What the "You don’t need to know what is going to happen next to make money" crowd can't seem to understand is that "knowing" what happens next comes from recognising what is happening now.

I’d rather quote Jesse Livermore than Mark Douglas any day:

“I noticed that in advances as well as declines, stock prices were apt to show certain habits, so to speak. There was no end of parallel cases and these made precedents to guide me.”

Whether you "need" to know or not depends on how efficient a trader you want to be. You might make money being a haphazard trader...go for it then!
 

VielGeld

Experienced member
1,421 179
Why criticize me for laughing instead of trying to think it through and understand WHY I'm laughing?
Don't underestimate randomness in the market. This is not poker where the game is very well defined; trading can effectively be called infinite in its interpretation.

An easy example: price is only limited by the player's perception of it. If the majority of people with the majority amount of cash think a $10 stock is really worth $1000, then there's nothing to say it can't hit that price.

In effect, the market is only predictable to the extent that you understand participant behaviour in specific cases. If you don't understand it, would flipping a coin make any difference?

So yes, you can predict the market within specific variables (your "edge"), but you can't apply this edge to all forms of market unless you have the experience to back it up. In the end, the only thing to rely on is your experience with watching the market, and it is from these observations that you get an idea where price could go.

In any case, I'll let Hare expound on his (her?) system since I've no idea how that thing would work and running a random system wouldn't be my cup of tea either.
 

bbmac

Veteren member
3,584 787
It seems there is confusion about what is an edge and what is prediction.

fact: You cannot predict the market

fact: An edge does not predict the market

A prediction is working under the assumption that you can look into the future and see what wil happen next whether that be from a gut feeling, or some kind of tech, fundie, global macro, quant or other analysis.

An edge simply takes advantage of a set of repeating circumstances that over a historical sample has shown there is money to be made by acting on it with the right money and risk management. In acting on it when it sets-up you are not predicting that it will make money again you are relying on the fact that the edge will continue in the future as it has done in the past - this may or may not come to pass but whatever the case - it is not prediction.

To think that prediction is possible or exists in any shape or form, using any form of analysis is false. The difference is not one of semantics it is one of actual defintion.

G/L
 

Shakone

Senior member
2,458 665
It seems there is confusion about what is an edhge and what is prediction.

fact: You cannot predict the market

fact: An edge does not predict the market

An edge simply takes advantage of a set of repeating circumstances that over a historical sample has shown there is money to be made by acting on it with the right money and risk management. In acting on it when it sets-up you are not predicting that it will make money again you are relying on the fact that the edge will continue in the future as it has done in the past - this may or may not come to pass but whatever the case - it is not prediction.

To think that prediction is possible or exists in any shape or form, using any form of analysis is false. The difference is not one of semantics it is one of actual defintion.

G/L
Those are not facts at all. Take a definition of prediction, I gave one. "a statement about the way things will happen in the future, often but not always based on experience or knowledge. "

Now here's a prediction. After I enter a trade, it will hit my stop or my target. This is a prediction, because it's a statement about what will happen in the future, and a very good prediction. Now if you want to assign other meanings to the word 'prediction' that are personal to you, then this is a case of semantics. Your'e welcome to do it, but foolish to argue it and impose your meanings on others.

Words mean different things to different people.

Here is what you should have written

FACT: bbmac believes You cannot predict the market

That's fine as a fact. The rest is just semantics.
 
  • Like
Reactions: hwsteele

Shakone

Senior member
2,458 665
What the "You don’t need to know what is going to happen next to make money" crowd can't seem to understand is that "knowing" what happens next comes from recognising what is happening now.

I’d rather quote Jesse Livermore than Mark Douglas any day:

“I noticed that in advances as well as declines, stock prices were apt to show certain habits, so to speak. There was no end of parallel cases and these made precedents to guide me.”

Whether you "need" to know or not depends on how efficient a trader you want to be. You might make money being a haphazard trader...go for it then!
The word 'knowing' to me is probably going to cause a semantic argument again. KNowing to me means with 100% certainty, there will never be a case that contradicts this knowing. To me, if you truly knew, you wouldn't need a stop at all. But even the best traders still need a stop. In trading I've never experienced knwoing for sure, because there are too many factors that can ruin things. Myself, my computer, my connection and of course the market.
 

bbmac

Veteren member
3,584 787
.....Now here's a prediction. After I enter a trade, it will hit my stop or my target. This is a prediction, because it's a statement about what will happen in the future, and a very good prediction. .....
A prediction is not a statement about the inevitability that one or the other of 2 known outcomes occuring. If you had said After I enter a trade, it will hit my stop then that is a prediction because you are suggesting one thing may happen over the other of the 2 known outcomes. Ie a prediction is a statement that favours one or more outcome (s) over all known outcomes.

This may seem like semantics but the distinction is important to state.

G/L
 
  • Like
Reactions: wackypete2

Shakone

Senior member
2,458 665
A prediction is not a statement about the inevitability that one or the other of 2 known outcomes occuring. If you had said After I enter a trade, it will hit my stop then that is a prediction because you are suggesting one thing may happen over the other of the 2 known outcomes. Ie a prediction is a statement that favours one or more outcome (s) over all known outcomes.

This may seem like semantics but the distinction is important to state.

G/L
To you....To you this is what a prediction is. Not to the dictionary, not to me, and not to many others. To you.
 

wekim

Junior member
36 7
"The words of my book nothing, the drift of it everything."
Walt Whitman

This thread has been a waste up until this point, save the first two responses that tried to give an answer with the opinion that "when a trend is active it is likely to continue." Whether thats true or not, at least its an attempt at discussion. In the mix, we've also concluded that people try to predict the validity of their edges by backtesting over statistically relevant samples. What else? Can we try to proceed?
 

bbmac

Veteren member
3,584 787
Which one of the statements below is a prediction and which is a statement of fact concerning all the known outcomes?

1. If I spin an unbiased coin it will a. land with Heads up, b. land with tails up, or c. land on it's side/edge.

2. If I spin an unbiased coin it will land with Heads up.

The dictionary gives the defintion of Preciction as '...the act of forecasting in advance which of the known possible outcomes of a given event will occur...'

G/L
 

wekim

Junior member
36 7
How can you claim that you are not arguing semantics when you are quoting definitions from the dictionary? You've made your point. Please read my previous post.
 

Shakone

Senior member
2,458 665
Which one of the statements below is a prediction and which is a statement of fact concerning all the known outcomes?

1. If I spin an unbiased coin it will a. land with Heads up, b. land with tails up, or c. land on it's side/edge.

2. If I spin an unbiased coin it will land with Heads up.

The dictionary gives the defintion of Preciction as '...the act of forecasting in advance which of the known possible outcomes of a given event will occur...'

G/L
Both of them are a prediction, neither of them is a fact. Geez.

This thread has been a waste up until this point, save the first two responses that tried to give an answer with the opinion that "when a trend is active it is likely to continue." Whether thats true or not, at least its an attempt at discussion. In the mix, we've also concluded that people try to predict the validity of their edges by backtesting over statistically relevant samples. What else? Can we try to proceed?
I have an understanding through experience of what the market is likely to do, and also what I would do in that situation, given various events (price-related) occurring. I use this knowledge to predict what it is likely to do next if one of those circumstances occurs, and look for an entry to take advantage of this. I then look for confirmation that this is playing out as I expected or not, and adjust based on that.
 

VielGeld

Experienced member
1,421 179
I have an understanding through experience of what the market is likely to do, and also what I would do in that situation, given various events (price-related) occurring. I use this knowledge to predict what it is likely to do next, and look for an entry to take advantage of this.
Which is pretty much what I and New_Trader have said as well. I've found experience to be the only common denominator.

I mean, look, you can find a gamut of styles that go from the mainstream to the esoteric. I was just having a conversation with a swing trader yesterday, and he said that in his couple months as a prop trader he practiced using only stochastics on his screen and no other visual or number whatsoever. This altered his view of the market such that he wouldn't trade without his proprietary indicators. Turns out his portfolio's up 75% in the last three years.

Personally, I couldn't trade like that. So that my take; experience is the only way to have an idea of where the market's going.

-----

I know you're looking for something more specific, but there isn't. Trading is about context. If you see a strong uptrend, best to go with it. If you see a large player gaming the market, best not to fade him. Stuff like that.
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock